Bush carries big antitrust stick

White House seen as harder on big business than expected

Published 5:30 am, Thursday, July 5, 2001

WASHINGTON -- If corporate executives were hoping for a break from antitrust scrutiny under President Bush, they have been sorely disappointed.

Despite its laissez-faire philosophy, the Bush administration has forged ahead on a number of important antitrust cases in industries from airlines and pharmaceuticals to the landmark case against Microsoft Corp.

Since taking over last month, the new heads of the Justice Department's antitrust division and the Federal Trade Commission have showed no signs of relaxing antitrust enforcement or taking a softer line on corporate mergers.

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"What both agencies have done in the way of antitrust enforcement in the last couple of weeks is suggestive of a fair measure of continuity," said Bill Baer, who served as antitrust chief at the FTC during the Clinton administration.

Baer and other former antitrust officials cautioned that it's too early to draw any final conclusions. But they said they were surprised by the strong line taken by U.S. Attorney General John Ashcroft when a U.S. appeals court ruled last week that Microsoft had abused its monopoly in personal computer operating systems.

Ashcroft stood unflinchingly before reporters and declared victory over the software giant.

"I am pleased to say that the court unanimously found that Microsoft engaged in unlawful conduct to maintain its dominant position in computer operating systems," Ashcroft told a news conference. "This is a significant victory."

That statement contrasted with the department's conciliatory stance in its case against U.S. tobacco companies.

"They could have done what they did with tobacco and say, `Hey, we've got a losing hand here, and we've got to fold it as quickly as possible,' " said Bert Foer, president of the American Antitrust Institute.

Only days earlier, the Justice Department served notice that it would appeal a judge's dismissal of a landmark suit charging AMR Corp.'s American Airlines with using predatory tactics to snuff out competitors.

AMR has its headquarters in Bush's home state of Texas and was a supporter of the president's campaign. Antitrust attorneys in Washington had thought there was a strong chance that the Justice Department would drop the case.

In its planned budget, the Bush administration proposed large increases for the Justice Department's antitrust division and the FTC, Foer said.

And in April, the administration gave the green light to an antitrust investigation of pharmaceutical companies, another industry that contributed heavily to Bush's campaign.

That probe, also begun under President Clinton, centers on allegations that big drug manufacturers have used U.S. patent laws to stifle the launch of cheaper generic drugs.

On Monday, the parent of United Airlines, UAL Corp., said it was in talks to drop its bid to buy US Airways Group, citing opposition from antitrust attorneys at the Justice Department.

"I've been pleasantly surprised," said Foer, the president of the American Antitrust Institute, a Washington-based organization that promotes antitrust enforcement. "I'm keeping my fingers crossed that what were seeing so far is an example of where they intend to go."